COMPUTIME GROUP LIMITED *

Transcription

1 COMPUTIME GROUP LIMITED * 金寶通集團有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 320) INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008 The board of directors (the Board ) of Computime Group Limited (the Company ) is pleased to announce the unaudited interim condensed consolidated results of the Company and its subsidiaries (collectively the Group ) for the six months ended 2008 (the Period ) together with the comparative figures for the six months ended CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) (Unaudited) Notes HK$ 000 HK$ 000 REVENUE 3, 4 1,246,603 1,102,761 Cost of sales (1,120,033) (919,881) GROSS PROFIT 126, ,880 Other income and gains 7,268 19,009 Selling and distribution costs (42,374) (44,256) Administrative expenses (70,175) (61,935) Other operating expenses (5,659) (7,476) Finance costs 5 (4,033) (8,070) Share of profits and losses of associates 477 2,549 Share of loss of a jointly controlled entity (311) PROFIT BEFORE TAX 6 11,763 82,701 Tax 7 (1,706) (8,187) PROFIT FOR THE PERIOD 10,057 74,514 1

2 (Unaudited) (Unaudited) Notes HK$ 000 HK$ 000 ATTRIBUTABLE TO: Equity holders of the Company 10,058 74,516 Minority interests (1) (2) 10,057 74,514 DIVIDEND 8 Proposed interim 18,260 EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY 9 Basic (HK cents) Diluted (HK cents) N/A N/A 2

3 CONDENSED CONSOLIDATED BALANCE SHEET March 2008 (Unaudited) (Audited) Notes HK$ 000 HK$ 000 NON-CURRENT ASSETS Property, plant and equipment 182, ,462 Goodwill 38,164 38,164 Club debenture Intangible assets 40,055 31,412 Interests in associates 9,829 9,376 Interests in a jointly controlled entity 3,564 Total non-current assets 274, ,119 CURRENT ASSETS Inventories 519, ,306 Trade receivables , ,724 Prepayments, deposits and other receivables 35,528 32,538 Amounts due from associates 1,936 6,827 Tax recoverable Cash and cash equivalents 525, ,819 Total current assets 1,569,290 1,535,374 CURRENT LIABILITIES Trade and bills payables , ,978 Other payables and accrued liabilities 130, ,206 Interest-bearing bank and other borrowings 247, ,098 Derivative financial instrument 34,358 Dividend payable 23,240 Amounts due to a jointly controlled entity 3,112 Amounts due to minority shareholders Tax payable 8,356 8,417 Total current liabilities 873, ,217 NET CURRENT ASSETS 695, ,157 TOTAL ASSETS LESS CURRENT LIABILITIES 970, ,276 3

4 2008 (Unaudited) HK$ March 2008 (Audited) HK$ 000 NON-CURRENT LIABILITIES Interest-bearing bank and other borrowings 34,049 40,856 Deferred tax liabilities 10,409 9,631 Total non-current liabilities 44,458 50,487 Net assets 925, ,789 EQUITY Equity attributable to equity holders of the Company Issued capital 83,000 83,000 Reserves 841, ,658 Proposed dividend 23, , ,898 Minority interests Total equity 925, ,789 4

5 NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Corporate Information The Company was incorporated as an exempted company with limited liability in the Cayman Islands on 23 June 2006 under the Companies Law, Chapter 22 (Law 3 of 1961 as consolidated and revised) of the Cayman Islands. The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and the principal place of business is located at 17th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong. The Group is principally engaged in investment holding, research and development, design, manufacture and trading of electronic control products. 2. Basis of Presentation The unaudited interim condensed consolidated financial statements of the Group for the six months ended 30 September 2008 have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) and with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the Stock Exchange ) (the Listing Rules ). The accounting policies and basis of preparation adopted in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 March 2008, except for the adoption of new and revised Hong Kong Financial Reporting Standards ( HKFRSs ), which also include HKASs and Interpretations, as disclosed below: HK(IFRIC)-Int 12 HK(IFRIC)-Int 14 Service Concession Arrangements HKAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction The adoption of these new and revised HKFRSs has had no material impact on the accounting policies of the Group and the method of computation of these interim condensed consolidated financial statements. The Group has not applied the following new and revised HKFRSs, those have been issued but are not yet effective, in these interim condensed consolidated financial statements: HKFRS 2 Amendments Share-based Payment Vesting Conditions and Cancellations 1 HKFRS 3 (Revised) Business Combinations 2 HKFRS 8 Operating Segments 1 HKAS 1 (Revised) Presentation of Financial Statements 1 HKAS 23 (Revised) Borrowing Costs 1 HKAS 27 (Revised) Consolidated and Separate Financial Statements 2 HKAS 32 and Puttable Financial Instruments and Obligations Arising on Liquidation 1 HKAS 1 Amendments HKAS 39 and HKFRS 7 Reclassification of Financial Assets 3 Amendments HKAS 39 Amendments Cash Flow Hedge Accounting of Forecast Intergroup Transactions 2 HKAS 39 Amendments The Fair Value Option 2 HK(IFRIC)-Int 13 Customer Loyalty Programmes 3 HK(IFRIC)-Int 15 Agreements for the Construction of Real Estate 1 HK(IFRIC)-Int 16 Hedges of a Net Investment in a Foreign Operation 4 5

6 Effective for annual periods beginning on or after 1 January 2009 Effective for annual periods beginning on or after 1 July 2009 Effective for annual periods beginning on or after 1 July 2008 Effective for annual periods beginning on or after 1 October 2008 The Group is in the process of making an assessment of the impact of these new and revised HKFRSs upon initial application. So far, it has concluded that except for the adoption of HKFRS 8 and HKAS 1 (Revised) which may result in new or amended disclosures, these new and revised HKFRSs are unlikely to have a significant impact on the Group s results of operations and financial position. 3. Revenue Revenue, which is also the Group s turnover, represents the net invoiced value of goods sold, after allowances for returns and trade discounts. 4. Segment Information The Group s operating businesses are structured and managed separately, according to the nature of their operations and the products and services they provide. Each of the Group s business segments represents a strategic business unit that offers products and services which are subject to risks and returns that are different from those of the other business segments. The following table presents revenue and profit for the Group s business segments for the six months ended 2008 and 2007: Building and home controls Appliance controls Commercial and industrial controls Total (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue: Sales to external customers 569, , , , , ,151 1,246,603 1,102,761 Segment results 8,448 58,689 9,487 16,780 14,635 13,066 32,570 88,535 Bank interest income 2,295 7,685 Other income and gains (excluding bank interest income) 4,973 11,324 Corporate and other unallocated expenses (24,208) (19,322) Finance costs (4,033) (8,070) Share of profits and losses of associates 477 2, ,549 Share of loss of a jointly controlled entity (311) (311) Profit before tax 11,763 82,701 Tax (1,706) (8,187) Profit for the period 10,057 74,514 6

7 5. Finance Costs (Unaudited) (Unaudited) HK$ 000 HK$ 000 Interest on: Bank loans and overdrafts wholly repayable within five years 3,922 7,803 Finance leases ,033 8, Profit Before Tax The Group s profit before tax is arrived at after charging/(crediting): (Unaudited) (Unaudited) HK$ 000 HK$ 000 Cost of inventories sold 1,112, ,862 Depreciation 20,135 16,862 Amortisation of intangible assets 11,336 6,406 Provision against inventories 7,968 2,019 Bank interest income (2,295) (7,685) Fair value loss on derivative financial instrument* 7, Tax * Included in Other operating expenses on the face of the condensed consolidated income statement. Hong Kong profits tax has been provided at the rate of 16.5% (2007: 17.5%) on the estimated assessable profits arising in Hong Kong during the Period. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates, based on existing legislations, interpretations and practices in respect thereof. Pursuant to the income tax laws of the People s Republic of China (the PRC ), Computime Electronics (Shenzhen) Co. Ltd. and Asia Electronics Technologies (Dongguan) Company Limited, wholly-owned subsidiaries of the Company, are entitled to a preferential tax treatment with full tax exemption from corporate income tax ( CIT ) for the two years starting from the first profitable year, after deducting the tax losses carried forward, and are granted a 50% reduction in tax for the three years thereafter. Computime Electronics (Shenzhen) Co. Ltd. was entitled to 50% tax relief for the six months ended 2007 and 2008 as those were respectively its fourth and fifth profitable years of operations, while Asia Electronics Technologies (Dongguan) Company Limited was fully exempt from CIT for the six months ended 2007 and 2008 as those were respectively its first and second profitable years of operation. 7

8 Under the new PRC Corporate Income Tax Law, which has been effective from 1 January 2008, corporate income tax rate for domestic companies and foreign-invested enterprises are unified at 25% effective from 1 January In addition, for those enterprises benefiting from lower preferential tax rates, such preferential rates will be gradually phased out by increasing them over the next five years. Accordingly, Computime Electronics (Shenzhen) Co. Ltd. is subject to CIT at 9.0% (2007: 7.5%) after 1 January (Unaudited) (Unaudited) HK$ 000 HK$ 000 Current Hong Kong 789 6,325 Current Mainland China and other regions 139 1,862 Deferred 778 Total tax charge for the period 1,706 8,187 No share of tax attributable to associates/a jointly controlled entity (2007: Nil) is included in Share of profits and losses of associates or Share of loss of a jointly controlled entity in the condensed consolidated income statement. 8. Dividend (Unaudited) (Unaudited) HK$ 000 HK$ 000 Proposed interim Nil (2007: HK$0.022 per ordinary share) 18,260 No payment of interim dividend for the six months ended 2008 is recommended. 9. Earnings Per Share Attributable to Equity Holders of the Company The calculation of basic earnings per share is based on the profit for the Period attributable to equity holders of the Company of HK$10,058,000 (six months ended 2007: HK$74,516,000) and the weighted average of 830,000,000 (six months ended 2007: 830,000,000) ordinary shares in issue during the Period. Diluted earnings per share for the current or prior period has not been disclosed as the share options granted and outstanding had an anti-dilutive effect on the basic earnings per share for the periods. 8

9 10. Trade Receivables The Group s trading terms with its customers are mainly on credit. The credit period granted to customers generally ranges from one to three months. An aged analysis of the trade receivables as at the balance sheet date is as follows: 2008 (Unaudited) HK$ March 2008 (Audited) HK$ 000 Within 1 month 449, ,870 1 to 2 months 13,231 22,791 2 to 3 months 8,429 11,366 Over 3 months 14,877 24, , ,724 The carrying amounts of the trade receivables approximate to their fair values. Included in the Group s trade receivables as at 2008 were amounts due from the Group s associates and a related company, in which certain beneficial shareholders and directors of the Company have beneficial interests, of HK$12,088,000 (31 March 2008: HK$11,378,000) and HK$8,172,000 (31 March 2008: HK$4,345,000), respectively, which are repayable on similar credit terms to those offered to the major customers of the Group. 11. Trade and Bills Payables An aged analysis of the trade and bills payables as at the balance sheet date is as follows: 2008 (Unaudited) HK$ March 2008 (Audited) HK$ 000 Within 1 month 391, ,541 1 to 2 months 57,064 20,734 2 to 3 months 6,572 3,697 Over 3 months 6,640 4, , ,978 The trade payables are interest-free and generally have payment terms ranging from one to three months. The carrying amounts of the trade and bills payables approximate to their fair values. 9

10 MANAGEMENT DISCUSSION AND ANALYSIS 2008, the Group, like most enterprises in the world faced an adverse business environment as a result of the global economic downturn which diminished market demand. On the positive side, the Group was able to maintain a degree of continuous growth in sales, customer base and branded businesses in the face of this adversity. Yet surging raw material prices, rising manufacturing costs in Mainland China and unfavourable foreign exchange fluctuations adversely affected the Group s profitability and continued to outpace management s efforts to throttle their impact. FINANCIAL HIGHLIGHTS Turnover During the Period, the Group achieved an increase in turnover by approximately 13.0% to HK$1,246,603,000 as compared to HK$1,102,761,000 recorded for the corresponding period last year. The growth was driven mainly by the considerable increase in sales to the European and Asian markets with strong performance of the Group s appliance controls and commercial and industrial controls business segments. Sales of appliance controls rose by approximately 29.7% to HK$477,555,000 while sales of commercial and industrial controls surged by approximately 32.9% to HK$199,560,000, offsetting the slight decrease of approximately 2.6% in the sales of building and home controls in an extremely soft United States ( US ) market. With the Group s strategic expansion of its business coverage and distribution network in Europe and Asia to diversify revenue sources, sales generated from the European and Asian markets increased by approximately 48.7% and 92.0% respectively, contributing approximately 37.5% and 18.1% to the Group s total turnover respectively. During the Period, sales to the Americas decreased by approximately 17.4% due to the further weakening of the US housing market, lowering its contribution to the Group s total turnover to approximately 43.8%. Profitability and Margin In the first half of the financial year 2008/2009, the Group faced more severe cost pressure, as many manufacturers with production facilities in Mainland China encountered. Cost of sales increased drastically due to the surge in raw material prices as well as the increase in labour costs and manufacturing overhead. Rising costs, compounded by continuous appreciation of Renminbi ( RMB ), substantially reduced the gross margin of the Group s businesses. Gross profit for the Period declined approximately 30.8% to HK$126,570,000 as compared to HK$182,880,000 for the corresponding period last year. With its continuous efforts in enhancing innovative design and product development capabilities, the Group was able to increase the selling prices and pass part of the soaring costs to most customers, yet the effect was not fully reflected in the first half of the year. 10

11 In analyzing the major operating expenses as a percentage to turnover, selling and distribution costs as well as finance costs were improved to 3.4% and 0.3% of the Group s total turnover as compared to approximately 4.0% and 0.7% respectively for the corresponding period last year. Administrative expenses as a percentage to turnover were relatively stable and maintained at approximately 5.6%. The Group recorded a profit attributable to equity holders of the Company of HK$10,058,000 for the Period, as compared to HK$74,516,000 for the same period last year. During the Period and throughout the remainder of the year, the Group s focus continues to be working with customers, suppliers and staff to manage costs, slim down operations and mitigate risk wherever possible. The Group may also benefit from recent improvement in the scale and downward direction of commodity costs and from the actions we are taking to improve profitability. BUSINESS REVIEW Despite the slowdown in traditional demand due to decrease in newly built homes, the Group managed to gain new customers through expansion into new geographical markets and increased its market share as a result of existing customers vendor consolidation. Building and Home Controls Business During the Period, sales of building and home controls amounted to HK$569,488,000, representing approximately 45.7% of the Group s total turnover. Sales from this business segment decreased slightly by approximately 2.6% as compared to the corresponding period last year mainly due to the decrease in demand for home controls products in the US, which was partly offset by the increase in sales of electronic controls for air conditioning products in Asia and the continuous increasing demand for energy management products in the European market. The Group continued to diversify the product and service offerings of its own Salus brand and expanded into new geographical markets in Europe. Apart from distributing heating controls and energy management products ranging from programmers, programmable thermostats, digital electronic thermostats, wiring centres, valves to under floor heating controls, the Group commenced to launch renewable energy products under its brand Salus Solar during the Period. Salus Solar offers effective solar systems for water heating, together with a full system design service and clean air project analysis. Although the sales of Salus brand products only contributed a small portion to the Group s total turnover, it is a fast growing business with sales revenue up approximately 91.7% during the Period. Appliance Controls Business Appliance controls business segment achieved a strong growth during the Period which sales increased by approximately 29.7% or HK$109,443,000 to HK$477,555,000 as compared to the corresponding period last year, accounting for approximately 38.3% of the Group s total turnover. The revenue growth was mainly attributable to the increasing sale of controllers to certain existing European customers due to its vendor consolidation as well as drawing new customers in other markets. 11

12 Commercial and Industrial Controls Business During the Period, commercial and industrial controls business segment reported considerable growth with sales up approximately 32.9% or HK$49,409,000 to HK$199,560,000, contributing approximately 16.0% to the Group s total turnover. The growth was driven by the increase in sale of industrial equipment products in Asia and generating sales from new customers. OUTLOOK In 2008, the global economy has been subjected to drastic changes and volatilities. The outbreak of the subprime mortgage crisis has triggered worldwide financial turmoil and credit crunch in the finance and banking industries. Economic downturn has undermined consumer confidence and lowered their spending. Weakening market demand, volatile commodity prices, general inflation and unprecedented foreign exchange fluctuations reduced profitability and capital spending of most corporations. Undergoing a challenging first six-month period of the financial year, although the Group managed to maintain sales growth, the unfavourable macroeconomic factors have set back its results for the Period. Under the uncertain economic conditions, it is difficult for the Group, its customers and vendors to forecast and plan accurately for future business growth. Yet, such factors as surging raw material prices, increase in labour costs and appreciation of RMB, which have adversely affected the Group s operating results in the first half of the year, seem to have stabilized recently. The persistence of such stability and the duration of the economic downturn will materially impact the outlook of the Group s performance in the year to come. Given the difficult operating environment, the Group will continue to pursue a prudent but proactive approach towards business expansion. The Group will put in greater efforts to increase market share and seek new customers by continuously diversifying its product and service offerings, with a view to strengthening its core businesses. Additionally, the Group will continue to explore business opportunities in Asian markets through expanding its branded businesses to capture potential customers as strategically planned. Despite the upheaval in the global economy and each of the markets the Group operates in, the management believes the Group s products, manufacturing services and innovation pipeline are particularly well suited for the smart energy and environmentally friendly approaches that are now a common element of many of the stimulus programs under consideration in both developed and developing countries. From the financial management perspective, the Group will exercise more stringent cost control measures, in particular on negotiating material price reduction, consolidating production facilities and increasing outsourcing activities to boost factory productivity as well as shrinking overall operating and administrative expenses. Conservative cash management including closely monitoring of inventory level and account receivables cycle is also in place to continuously maintain a healthy cash position of the Group. 12

13 Though it is generally expected that the business conditions in the coming year and the next will be more difficult, which will further accelerate the pace of industry consolidation, this provides opportunities for stronger players to gain further market share. Backed by the Group s resilient business model, diversified customer base, strong pipeline as well as a still healthy financial position, the Group remains confident in its prospects and its capabilities to overcome the challenges ahead. LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE As at 2008, the Group had cash and cash equivalents of HK$525,755,000, majority of which were denominated either in US dollars or Hong Kong dollars and HK$61,618,000 were denominated in RMB. Average trade receivable and average inventory turnover periods were 70.1 days and 71.4 days respectively. Overall, the Group maintained a strong current ratio of 1.80 as at 30 September As at 2008, total interest-bearing bank and other borrowings were HK$281,152,000, comprising bank loans and overdrafts of HK$280,595,000 and finance lease payables of HK$557,000, of which HK$247,103,000 will be repayable within one year and HK$34,049,000 will be repayable after one year. The majority of these borrowings were denominated either in US dollars or Hong Kong dollars to which the interest rates applied were primarily subject to floating interest rate. Total equity attributable to equity holders of the Company as at 2008 amounted to HK$924,900,000. As at 2008, the Group had net cash of HK$244,603,000, representing total cash and cash equivalents less total interest-bearing bank and other borrowings such that no gearing ratio was presented. The Group s net cash position remained strong during the Period. TREASURY POLICIES The majority of the Group s sales and purchases are denominated in US dollars and Hong Kong dollars and also denominated in European currency to a certain extent. Due to the fact that Hong Kong dollar is pegged to US dollar, the Group s exposure to this foreign currency risk is low. Certain production and operating overhead of the Group s production facilities in Mainland China are denominated in RMB. As at the date of this announcement, the Group does not have any outstanding financial instrument nor enter into any financial instrument for hedging purpose. Nevertheless, the Group will closely monitor its overall foreign exchange exposure and interest rate exposure and will adopt a proactive but prudent approach to minimise the relevant exposures when necessary. CAPITAL EXPENDITURE AND COMMITMENTS During the Period, the Group incurred total capital expenditure of approximately HK$31,407,000 which were spent for addition of property, plant and equipment and deferred expenditure. As at 2008, the Group had capital commitments of HK$2,325,000, which represented commitments authorized but not contracted for in respect of investment in a subsidiary. Furthermore, the Group had commitments contracted but not provided for mainly in respect of acquisition of property, plant and equipment of HK$1,850,

14 CONTINGENT LIABILITIES As at 2008, the Group did not have significant contingent liabilities. EMPLOYEE INFORMATION As at 2008, the Group had a total of approximately 5,100 full-time employees. Total staff costs for the Period amounted to HK$108,004,000. Salaries and wages are generally reviewed on an annual basis in accordance with individual qualifications and performance, the Group s results and market conditions. The Group provides year-end double pay, discretionary bonus, medical insurance, provident fund, educational subsidy and training to its employees. The Company has also adopted a share option scheme under which the Company can grant options to, inter alia, employees of the Group to subscribe for shares of the Company with a view to rewarding those who have contributed to the Group and encouraging employees to work towards enhancing the value of the Company and its shares for the benefit of the Company and its shareholders as a whole. As at 2008, 2,868,000 share options remained outstanding under such share option scheme. USE OF NET PROCEEDS FROM THE COMPANY S INITIAL PUBLIC OFFERING The proceeds from the Company s issue of new shares (including shares issued on the exercise of overallotment option) for listing on the Stock Exchange in October 2006, after deduction of related expenses, amounted to approximately HK$469,419,000. The Group intends to apply the net proceeds for the purposes as set out in the section headed Future Plans And Use of Proceeds in the prospectus of the Company dated 25 September As at 2008, approximately HK$106,250,000 were utilised for strategic business combination and acquisitions, approximately HK$8,215,000 for the expansion of distribution network, approximately HK$44,176,000 for the repayment of bank borrowings and approximately HK$44,176,000 for general corporate purposes, and the remaining balance of the net proceeds were placed in certain financial institutions and licensed banks in Hong Kong as short-term deposits. INTERIM DIVIDEND The Board does not recommend the payment of interim dividend for the Period (2007: HK$0.022 per ordinary share). PURCHASE, SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIES Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company s listed securities during the Period. 14

15 CORPORATE GOVERNANCE The Company is committed to maintaining a high standard of corporate governance with a view to enhancing the management efficiency of the Company as well as preserving the interests of the shareholders of the Company as a whole. The Board is of the view that the Company has met the code provisions set out in the Code on Corporate Governance Practices contained in Appendix 14 to the Listing Rules for the Period. CODE OF CONDUCT FOR DIRECTORS AND EMPLOYEES SECURITIES TRANSACTIONS The Company has adopted its own code of conduct regarding dealings in the securities of the Company by the directors, senior personnel and certain employees of the Group (who are likely to be in possession of unpublished price-sensitive information relating to the Company or its securities) (the Own Code ) on terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ) as set out in Appendix 10 to the Listing Rules. Having made specific enquiry of the Company s directors, all the directors confirmed that they have complied with the required standards set out in the Model Code and the Own Code throughout the Period. In addition, no incident of non-compliance of the Own Code by the employees of the Group was noted by the Company throughout the Period. AUDIT COMMITTEE The Audit Committee of the Company, which comprises three independent non-executive directors of the Company, namely Mr. Luk Koon Hoo (Chairman of the Audit Committee), Mr. Patrick Thomas Siewert and Mr. Steven Julien Feniger and two non-executive directors of the Company, namely Mr. Kam Chi Chiu, Anthony and Mr. Arvind Amratlal Patel, has reviewed with the senior management of the Group the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters, including the review of these interim results. Messrs. Ernst & Young, the Company s external auditors, have been engaged by the Company to conduct certain procedures on the Group s interim condensed consolidated financial statements for the Period in accordance with the Hong Kong Standard on Related Services 4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information issued by the HKICPA. The Audit Committee of the Company discussed with Messrs. Ernst & Young the findings of these procedures including consistency of accounting policies and procedures adopted by the Group in preparing these financial statements and the relevant disclosures made in accordance with the requirements of HKAS 34 and Appendix 16 to the Listing Rules. PUBLICATION OF FURTHER INFORMATION The interim report of the Company for the Period containing all the information required by the Listing Rules will be despatched to the shareholders of the Company and published on the websites of the Stock Exchange ( and the Company ( in due course. 15

16 BOARD MEMBERS As at the date of this announcement, the Board comprises (i) three executive directors, namely Mr. Auyang Ho (Chairman), Mr. Auyang Pak Hong, Bernard (Chief Executive Officer) and Ms. Choi Po Yee, Alice; (ii) three non-executive directors, namely Mr. Kam Chi Chiu, Anthony, Mr. Arvind Amratlal Patel and Mr. Wong Chun Kong; and (iii) three independent non-executive directors, namely Mr. Luk Koon Hoo, Mr. Patrick Thomas Siewert and Mr. Steven Julien Feniger. APPRECIATION On behalf of the Board, I would like to express my gratitude to our management and staff for their dedication and contribution to the Group throughout the Period. Hong Kong, 15 December 2008 * For identification purposes only By Order of the Board Computime Group Limited Auyang Ho Chairman 16